JBF Industries auditor flags unprovided interest and losses

JBF Industries Limited reported a standalone loss of Rs 74 lakh for the quarter ended 30 September 2026, but its auditor said unprovided interest would make the loss Rs 128.68 crore. The auditor identified cumulative interest not provided of Rs 2,265.25 crore and drew attention to the company’s statement that it ceases to continue as a going concern.

What did JBF Industries’ auditor qualify?

JBF Industries’ auditor qualified its limited-review conclusion because the company had not provided Rs 2,265.25 crore of interest as at 30 September 2026. S. C. Ajmera & Co. said the company had applied a nil interest rate to term loans, cash-credit limits and cumulative redeemable preference shares, or CRPS, rather than the documented rates.

The Rs 2,473.79 crore borrowing base cited by the auditor comprised term loans of Rs 641.21 crore, cash-credit limits of Rs 1,718.62 crore and CRPS of Rs 113.96 crore. The auditor said the treatment was not compliant with Indian Accounting Standard 23, or Ind AS 23, on borrowing costs, read with Ind AS 109 on financial instruments.

The report covers unaudited standalone results for the quarter and half year ended 30 September 2026, approved by the resolution professional on 12 November 2026. It was a limited review under Standard on Review Engagement 2410, which the auditor said provides less assurance than an audit and does not result in an audit opinion.

How would interest provisioning change JBF Industries’ quarterly loss?

Providing interest at documented rates would increase JBF Industries’ finance cost by Rs 127.94 crore and change its reported quarterly loss of Rs 74 lakh into a loss of Rs 128.68 crore. The auditor gave the same Rs 128.68 crore figure for total comprehensive loss for the quarter ended 30 September 2026.

Earnings per share, or EPS, would be negative Rs 15.71 instead of the reported negative Rs 0.09, according to the review report. The reported standalone loss was Rs 44 lakh in the preceding quarter ended 30 June 2026 and Rs 16.86 lakh in the quarter ended 30 September 2025, compared with Rs 74 lakh in the latest quarter.

The balance-sheet effect reflects accumulated omitted interest rather than only the September-quarter charge. Other current financial liabilities would have been Rs 2,724.93 crore at 30 September 2026, versus the reported Rs 459.68 crore, while other equity would have been negative Rs 5,206.47 crore instead of reported negative Rs 2,941.22 crore.

Why is JBF Industries not considered a going concern?

JBF Industries’ filing says the company ceases to continue as a going concern because its ability to sustain itself and generate revenue to meet financial commitments has been critically dented. The auditor highlighted this disclosure in an emphasis-of-matter paragraph in its 12 November 2026 review report.

The company said operations from all locations had been discontinued after lenders other than Tamilnad Mercantile Bank Ltd assigned debts and rights in secured assets to CFM Asset Reconstruction Pvt. Ltd. It also disclosed that secured assets, including investments in subsidiaries and step-down subsidiaries, were repossessed on 6 June 2022.

At 30 September 2026, JBF Industries reported total assets of Rs 60.20 crore and total current liabilities of Rs 2,919.55 crore. Reported other equity was negative Rs 2,941.22 crore, compared with negative Rs 2,858.16 crore at 31 March 2026, while equity share capital remained Rs 81.87 crore.

Which claims and reporting gaps remain at JBF Industries?

JBF Industries has not provided for a Rs 128.48 crore claim linked to raw-material supplies to UAE-based JBF RAK LLC. The auditor said the legal outcome and any consequential provision could not be quantified, while the company said the creditor’s claim had been admitted by the resolution professional based on a National Company Law Tribunal, or NCLT, order.

Tamilnad Mercantile Bank Ltd issued a demand notice dated 23 November 2021 for Rs 32.94 crore plus future interest under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. Its matter is before the Gujarat High Court after an appeal against a Debt Recovery Appellate Tribunal order, and another interlocutory application filed with NCLT had not yet been listed, according to the filing.

JBF Industries also disputes the invocation of a corporate guarantee given to lenders of JBF Petrochemicals Ltd. One lender invoked Rs 1,991.55 crore on 24 April 2018 from a guarantee originally stated at Rs 3,775.87 crore, but the company says the guarantee had expired on 1 April 2018 and has made no provision.

The auditor further noted that JBF Industries had not prepared consolidated financial statements, although it has subsidiaries, because it did not receive audited subsidiary accounts. The filing also disclosed no chief executive officer, chief financial officer, company secretary, compliance officer or internal auditor, and said the auditor could not obtain Axis Bank statements and supporting documents for the year ended 31 March 2026.

What happens next in JBF Industries’ insolvency process?

JBF Industries’ Corporate Insolvency Resolution Process, or CIRP, has been extended by NCLT until 25 November 2026. An operational creditor’s application was admitted on 25 January 2024, and an earlier resolution plan approved by the Committee of Creditors, or CoC, was returned by NCLT with observations.

The CoC decided to rerun the process and received nine resolution plans, JBF Industries said in its 12 November 2026 filing. Negotiations had been completed, revised or updated plans were being received, and compliant plans are to be put to a CoC vote before an application is moved to NCLT for approval.

The company also disclosed an unresolved ownership reporting issue involving JBF Global Pte Ltd. Madelin Enterprises Pvt. Ltd. acquired JBF Industries’ holding in the Singapore subsidiary under the Securitisation Act on 31 March 2023, but the shares remained registered in JBF Industries’ name pending transfer.

Conclusion

JBF Industries’ reported Rs 74 lakh September-quarter loss excludes Rs 127.94 crore of interest expense identified by the auditor, producing an adjusted loss of Rs 128.68 crore. The cumulative unprovided interest of Rs 2,265.25 crore would materially increase reported liabilities and deepen negative other equity, alongside discontinued operations and the going-concern disclosure.

The immediate disclosed milestone is 25 November 2026, when the extended CIRP period ends. Readers should watch whether the CoC votes on revised resolution plans and whether NCLT approval follows, while the TMBL proceedings, the disputed corporate guarantee and the treatment of creditor claims remain unresolved.